GOLD MAFIA: Legal watchdog calls for RBZ commission of inquiry; says central bank’s image and reputation battered

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By Reason Razao & UK Correspondent

A LEGAL watchdog has called for a forensic investigation of the Reserve Bank of Zimbabwe (RBZ) after a four-part documentary series by an international news channel claimed the central bank was complicit in gold smuggling and associated money laundering.

The documentary series by Qatar-based television network, Al Jazeera, exposed the network behind gold smuggling in Zimbabwe including their claimed high profile political facilitators as well as the alleged role of the RBZ in laundering the proceeds.

The RBZ issued a statement dismissing the allegations as “sensationally wild, false and malicious” and urged members of the public “to dismiss the false allegations with the contempt they deserve”.

However, the central bank’s Financial Intelligence Unit (FIU), has since ordered the freezing of the bank accounts of at least four individuals cited in the documentary series.

Legal watchdog, Veritas drew attention to this apparent contradiction in the RBZ’s response.

“ … the Financial (Intelligence) Unit of the Reserve Bank has frozen the bank accounts of at least four persons portrayed in the series, which suggests there is at least some truth in the allegations,” Veritas said in a statement this week.

According to Veritas, the allegations against the RBZ had tarnished the image of the country’s apex bank.

“The persons alleged to be carrying on this illegal trade were shown boasting of their close links to the Reserve Bank of Zimbabwe and to senior government officials, up to and including the President and his wife,” reads the Veritas statement.

“They said they had the Governor of the Reserve Bank “on speed dial” and that senior managers of Fidelity Printers and Refineries, a subsidiary of the Reserve Bank, were on their payroll to facilitate the issue of licences to buy and export gold.”

The legal watchdog added; “The Reserve Bank is a vital cog in the country’s economy, and it is essential for it to maintain a spotless reputation for competence, fiscal responsibility and probity.

“The Al Jazeera series, coming on top of the Bank’s illegal quasi-fiscal activities, have tarnished its reputation and sown suspicion within financial markets, multi-lateral financial institutions and the general Zimbabwean public.”

According to Veritas, a forensic investigation “in the interests of transparency and accountability an investigation … to ascertain precisely what the Bank and its subsidiary companies have been and are doing and whether their activities have been lawful.”

The President could appoint a commission of inquiry or the finance minister could order an investigation, with the third possibility being to direct the “Auditor-General to conduct a forensic audit of the Bank’s financial statements and the financial statements of its subsidiaries”.

“An audit or investigation conducted in any of those ways would have sufficient legal authority to uncover wrongdoing on the part of the Reserve Bank and to override any right to secrecy conferred by section 60 of the Reserve Bank of Zimbabwe Act,” explained Veritas.

“The audit or investigation could be done in partnership with reputable international audit firms or agencies so that all stakeholders – international markets, multi-lateral financial institutions, and the general public – are satisfied that the exercise has been conducted thoroughly and fairly.

“However it is done, a thorough investigation should be conducted if our country’s reputation is to be upheld.  As the Governor of the Reserve Bank himself said, ‘the truth cannot be hidden and … the truth shall prevail’.”